Written Commentary
STOCK INDEX FUTURES
U.S. stock futures are lower as investors assess the outlook for tightening monetary policy from the Federal Reserve while watching the situation in Ukraine.
Futures remain above downtrend lines.
February wholesale inventories increased 2.1% when a gain of 0.7% was expected.
The 9:30 central time March Dallas Federal Reserve manufacturing index is anticipated to be 12.5.
CURRENCY FUTURES
The U.S. dollar index advanced above a three-week triangle pattern and is closing in on two-year highs.
The British pound depreciated as investors await further clues on the next monetary policy steps after the Bank of England softened its tone during its recent policy meeting. The BoE delivered its third straight rate hike, but one policymaker voted to keep rates unchanged while in January all members favored a rate increase.
The Swiss franc weakened from the two-week high due to indications that the Swiss National Bank stepped up currency interventions to curb the franc’s advance.
The Japanese yen fell to its lowest since August 2015, after the Bank of Japan today intervened to stop government 10-year bond yields from rising above its key target. The BoJ offered to buy an unlimited amount of government bonds to stop the sell-off prompted by rising global interest rates. The central bank said it would conduct similar operations Tuesday through Thursday.
Lower prices are likely for the Japanese yen.
INTEREST RATE MARKET FUTURES
In the overnight trade the 30-year Treasury bond futures fell to the lowest level since May 2019 before a recovery.
Federal Reserve Bank of New York President John Williams on Friday said a half-percentage-point increase in interest rates is an option if warranted by the data.
The Treasury will auction two and five-year notes today.
Some analysts believe that it may be difficult for the Federal Reserve and other major central banks to maintain ramped-up hawkish policies if the rate of growth in the global economy slows.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
